AVIC Group set for restructuring, as China moves to produce indigenous ''jumbo'' aircraft news

07 January 2008

China's two principal state-owned aircraft makers, AVIC I and AVIC II, are set to enter a restructuring phase that will clear the path for the manufacture and marketing of a "jumbo" commercial aircraft.

According to AVIC II vice MD, Liang Zhenhe, the company's engineering joint ventures with subsidiary Shan'xi Aircraft Co and Russia's Antonov design bureau are likely to play a role in the jumbo aircraft's development.

According to AVIC I vice MD, Gu Huizhong, China's Commission of Science, Technology and Industry for National Defence and other relevant government organs are currently working on the restructuring plan.

With the Chinese Government laying increasing emphasis on the development of a "jumbo aircraft," it is believed that within the AVIC Group, Beijing will likely separate the civil aviation business from the military and integrate the civil business of AVIC I and AVIC II into one company or several subsidiary companies.

The China State Council had decided to set up a new company to develop a large commercial aircraft last February. According to industry analysts, this new entity will likely be focused on aircraft design and final assembly, while the restructured AVIC will be responsible for the production of parts and equipment.

In July 1999 AVIC was divided into two organizations, AVIC I and AVIC II. Both of these organizations are under the administrative and regulatory control of the new COSTIND.